Q4 2025 Hess Midstream LP Earnings Call Transcript
Key Points
- Hess Midstream LP (HESM) completed its multiyear projects on time and on budget, strategically growing its gas gathering and compression system.
- Projected capital spending for 2026 is significantly lower at approximately $150 million, a 40% reduction from 2025, with further reductions expected in 2027 and 2028.
- The company expects significant free cash flow generation in 2026 of $850 million to $900 million, reflecting 12% growth over 2025 at the midpoint.
- Approximately 95% of revenues are protected by minimum volume commitments (MVCs) for 2026, providing a stable income base.
- Hess Midstream LP (HESM) plans to use excess free cash flow for incremental shareholder returns and debt repayment, supporting a targeted 5% distribution growth per Class A share through 2028.
- Fourth-quarter volumes were generally flat year-over-year and down relative to the third quarter due to severe weather in December.
- Net income for the fourth quarter decreased to $168 million from approximately $176 million in the third quarter.
- Severe winter weather is expected to impact first-quarter 2026 volumes, with lower volumes anticipated across systems.
- Total revenues excluding pass-through revenues decreased by approximately $19 million in the fourth quarter due to lower revenues from severe weather and lower third-party volumes.
- The company expects net income for the full year 2026 to be approximately flat at the midpoint compared with 2025, indicating limited growth in net income.
Good day, ladies and gentlemen, and welcome to the fourth-quarter 2025 Hess Midstream conference call. My name is Gigi, and I'll be your operator for today. (Operator Instructions) Please be advised that today's conference is being recorded for replay purposes.
I would now like to turn the conference over to Jennifer Gordon, Vice President of Investor Relations. Please proceed.
Thank you, Gigi. Good morning, everyone, and thank you for participating in our fourth-quarter earnings conference call. Our earnings release was issued this morning and appears on our website www.hessmidstream.com.
Today's conference call contains projections and other forward-looking statements within the meaning of the federal securities laws. These statements are subject to known and unknown risks and uncertainties that may cause actual results to differ from those expressed or implied in such statements. These risks include
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